News Law and Policy

Federal Appeals Court Rules No For-Profit Religious Rights, Creating Split Ripe for SCOTUS Review

Jessica Mason Pieklo

On Friday, in the latest case to address the provision in the Affordable Care Act that mandates contraception coverage in employee health insurance plans, the Third Circuit ruled that the Pennsylvania-based Conestoga Wood Specialties Corporation must comply.

On Friday, the U.S. Court of Appeals for the Third Circuit ruled against Conestoga Wood Specialties Corporation, a Pennsylvania company that makes wooden cabinets and furniture, and its owners that wanted to avoid compliance with the federal rule requiring employers to provide insurance coverage for contraception. The ruling upheld a lower court’s denial of a preliminary injunction attempting to block enforcement of the rule.

With a vote of 2 to 1, the court held that “for-profit, secular corporations cannot engage in religious exercise.” The Pennsylvania company, which employs about 950 people and is owned by a Mennonite family, said the contraception mandate violated its rights under the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act.

The decision is a departure from an earlier ruling from the U.S. Tenth Circuit Court of Appeals that recognized Hobby Lobby’s for-profit claims to protected religious rights and creates a split in the federal appeals courts, increasing the already high chances the Supreme Court will take up the issue as early as next fall.

Similarly to the Tenth Circuit, the Third Circuit reviewed the Supreme Court’s 2010 decision in Citizens United v. FEC, the decision that granted some First Amendment speech rights to corporations, but unlike the Tenth Circuit, did not use the decision to find similar corporate religious rights. Judge Robert Cowen, writing for the Third Circuit majority, said that while there was “a long history of protecting corporations’ rights to free speech,” that could justify the Citizens United decision to protect electoral speech rights of corporations, there was no similar history of protection for the free exercise of religion by corporations. “We simply cannot understand how a for-profit, secular corporation—apart from its owners—can exercise religion,” the court wrote. “A holding to the contrary … would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.”

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Third Circuit Judge Kent Jordan offered a vigorous dissent, saying the majority decision reflected a “cramped and confused understanding” of religious rights granted by Congress and the U.S. Constitution and affirming that what conservatives are seeking through these legal challenges is not just an expansion, but a broad re-definition of the limits of religious exercise rights. “Government should be enjoined from telling sincere believers in the sanctity of life to put their consciences aside and support other people’s reproductive choices,” he wrote.

This case is one of more than 60 across the country addressing the provision in the Affordable Care Act that mandates contraception coverage in employee health insurance plans. The American Civil Liberties Union filed a friend-of-the-court brief in the case and reacted to the decision in a statement. “While the Constitution ensures that we are entitled to our religious beliefs, it also safeguards against having someone else’s beliefs imposed upon us,” said Louise Melling, deputy legal director of the ACLU. “Businesses cannot deny women coverage for something as fundamental as contraception by using the owners’ personal beliefs as an excuse for discrimination.”

Ultimately, that’s what these legal challenges to the mandate will decide—is it acceptable for businesses to hide behind their owners’ religious beliefs to excuse discriminating against employees? If the ultimate answer to that question is yes, then why should we believe that businesses will stop with simply denying contraception coverage?

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